For Diane Hessan, selling is a lot different than it was just a
few years ago. Sales cycles are longer as prospects convene
15-person committees to debate even the smallest sales decisions.
Customers demand to see a definitive ROI before they'll buy,
and they ask for more price breaks when they do.

"It's just a much more challenging sales
environment," says Hessan, CEO of Communispace, a
40-employee software company in Watertown, Massachusetts, that
helps blue-chip companies get customer feedback and insight over
the Web.

Hessan and the company's four in-house salespeople are
putting more emphasis on solid relationships with existing
customers, and the company's implementation people are much
more involved in the sales process. A referral program pulls
promising leads from customers, and each resulting sales call is
customized to the prospect much more than in the past.
"We're trying to reduce our ice-cold [sales] calls,"
Hessan says, "and we're spending a lot of time collecting
ROI stories and using them in our sales process."

Hessan, 49, isn't the only entrepreneur navigating a sales
climate that's gotten a little better but still leaves much to
be desired. When sales and marketing research firm CSO Insights
surveyed more than 1,300 sales professionals for its report on
sales effectiveness in the fourth quarter of 2003, only 49 percent
of sales reps met or exceeded their quotas for the past year-the
lowest percentage since 1994. Even more startling, 70 percent of
the study's participants were small businesses with fewer than
50 employees. "For the under 50 [employee] group, it's
even worse. For them, quota attainment was 46.6 percent," says
, a partner at CSO Insights and co-author of the
firm's sales-effectiveness study, released in February 2004.
"It's fair to say that virtually everything is going in
the wrong direction for salespeople."

It takes more forethought and way more strategizing to meet
today's biggest sales challenges. "How you sell is
becoming as important, maybe more important, than what you
sell," Trailer says. Here's how successful entrepreneurs
are overcoming their sales challenges.

Sales Challenge No. 1:

Increasing Sales Effectiveness
Making effective sales calls is one area where salespeople are
falling short. A sales-effectiveness study of nearly 2,300 sales
leaders conducted late last year by Reno, Nevada, sales training
and consulting firm Miller Heiman found 67 percent of sales
professionals believe their sales teams aren't making enough
calls to add good leads to the sales funnel. In addition, 6 out of
10 say their sales departments aren't qualifying leads as well
as they should.

For Mike Robson, building greater structure around the sales
process has been key to increasing effectiveness. Robson, 39, is
founder and CEO of ATA Services, a 48-employee company in Salt Lake City
that maintains, refurbishes and brands existing ATM machines at
banks and credit unions around the country. He's tightened the
sales team's reporting procedures, monitoring the progress of
the company's four-person sales team through daily call
reports. Those call reports keep Robson posted on sales proposals
and the salesperson's strategy going into a selling situation.
More structure is generating more sales: ATA Services' sales in
two of the four sales territories topped $1 million for the first
time last year, and the company projects sales of $6.5 million in
2004. "We've had to become better at selling. We used to
go by our gut, but we've moved to a more structured
system," says Robson. "That's helped us."

Successful sales teams are establishing multiple contacts within
companies that put them on the CEO's radar from a variety of
different directions-marketing, IT and accounting, to name a few.
They're also changing the way they approach prospects. Today,
research combined with highly qualified calls to set up
informational meetings with prospects is hot; overscripted
telemarketing calls are not. Direct marketing is out; creating
"safe venues"-webinars, breakfast meetings,
research-report release events-to meet prospects and build
credibility is in. "The space is so crowded that the way to
get me to understand you is to give me some value," says Sam
Reese, CEO and president of Miller Heiman. "The sales call
comes afterward."

Steve Johnson is founder and president of G2 Safety, an
Anaheim, California, distributor of gear designed to protect
against workplace hazards. A few years ago, Johnson, 35, relied
solely on inside sales and direct marketing to drive traffic to the
company's Web site. But now, G2 Safety is putting more boots on
the ground, having recently hired four territorial sales reps, with
six more to be hired by year-end. And the company is also joining
trade organizations to identify quality leads. G2 Safety's
sales hit $1.5 million last year, and Johnson forecasts sales of
more than $3 million in 2004. "We originally thought we could
do direct marketing only," Johnson says. "[Now] I think
you need to do everything."

Increasing Market Share & Customer Loyalty

Sales Challenge No. 2:

Increasing Market Share
Expanding a customer base is getting harder: Fifty-three percent of
sales leaders in the Miller Heiman study believe their companies
will grow this year by increasing share in existing markets, but
more than half admitted that selling new products and services
remains a significant challenge.

Blame it on complexity and competition. Roughly 70 percent of
firms in the CSO Insights study say competitive activity is
increasing, and nearly two-thirds say products are getting more
complex and harder to sell.

To spur market-share growth, companies are reinvesting in sales
and product training. They're increasing salespeople's
access to product experts. And there's new emphasis on
understanding the core of a product or a service's value
proposition to retain current customers and lure business away from
the competition. "Don't debug your product," Trailer
says. "Debug your sales process."

ATA Services aims for 3 to 5 percent of a bank's annual ATM
budget. "We think we've hit a home run if we get
that," Robson says. "Most [banks] have a slush fund, and
our job is to get that slush fund." At press time, ATA
Services was closing in on a $5 million contract with a large bank,
and it hopes to break into the Canadian bank market.

Increasing market share comes down to solving a problem instead
of hawking a product, and that means finding out what's not
working for prospects. "Look for areas of pain, and try to
sell against those," says Robson. It also requires staying
focused on a specific market segment. "We do ATM-related
[work]," Robson says. "We don't do windows, and we
don't change their oil. This specialization has allowed us to
get deeper into our customers' budgets than some of our
competitors."

Communispace is spending more time trying to build relationships
with existing accounts than trying to sell new business, Hessan
says. The company's salespeople point to very specific examples
of how the company's software has helped clients accelerate
their product development process. "We've invested more in
understanding prospects before we make the call, and we're
really getting educated," says Hessan.

Companies are putting more emphasis on upselling, cross-selling
and building strong referral programs; and they're giving good
salespeople more discretion to determine which clients and
prospects are best suited to such opportunities. "There's
a place for the cross-sell and the upsell, and I think it's
smart to do it. But you have to know when to do it," says
Denis Pombriant, CRM industry analyst and founder and managing
principal of Stoughton, Massachusetts-based research and consulting
firm Beagle Research Group, which specializes in the CRM
and Internet infrastructure markets. "Companies simply need to
get into the mind-set of the customer."

Sales Challenge No. 3:

Increasing Customer Loyalty
Product life cycles are getting shorter, making it tougher to
differentiate one product or service from another. Customer loyalty
is harder to come by as a result: Sixty-four percent of sales
leaders in the Miller Heiman study believe buyers treat their
specific industry as a commodity-driven market.

Salespeople find they have to create a layer of value around
their offering through added service, best practices and superior
industry knowledge. This is what keeps products and services from
becoming just another commodity in the eyes of the prospect, says
Dave Stein, founder of Mahopac, New York, sales consulting firm The
Stein Advantage and author of How Winners Sell: 21 Proven Strategies to
Outsell Your Competition and Win the Big Sale.
"Customers aren't playing golf these days; they're
playing hardball," he says. "A product or service is just
a medium to deliver value to the customer."

To maintain loyalty, G2 Safety's sales team is selling a
program where customers accumulate points toward new purchases for
each dollar they spend. "We want to reward companies for
buying from us," says Johnson.

Reese believes entrepreneurial firms should break their business
into three "loyalty buckets": the business they're
getting from existing customers, the business they're getting
from new customers, and the customers that are defecting.
Understanding what drives each group is key to selling.
"Always have a road map of their issues," Reese says.
"Clearly communicate [how] you'll improve your offering to
their company."

"Going vertical"-separating sales territories by
industry rather than geography so each salesperson truly
understands the threats, challenges, risks and opportunities facing
a particular market segment-is another way smart companies are
generating loyalty. "Initially, it seems to be more
cost-effective if you have a geographical orientation," Stein
says. "But if [salespeople] are taught to leverage industry
knowledge, the net result is a much higher increase in profit per
customer, a high level of credibility, and less reliance on
discounts and special deals."

In Closing...

What does it take to make a sale right now? We asked these
experts and entrepreneurs.

Diane Hessan, CEO of Communispace, a software company in
Watertown, Massachusetts: "Selling is all about earning
the right to do business with someone. Put yourself in their shoes,
and understand what their issues are. In today's business
environment, the most critical element of any sale is trust.
Ultimately, when someone says yes to you, they're saying
'I'm betting on what this person is telling
me.'"

Denis Pombriant, CRM industry analyst and founder and
managing principal of Stoughton, Massachusetts-based research and
consulting firm Beagle Research Group, which specializes in the CRM
and Internet infrastructure markets: "I don't think
things are [any] different than they've ever been. Selling is
hard work. It requires preparation and diligence. It's simply
getting to know the customer and understanding the customer's
needs. You can't pin it down to saying three Hail
Marys."

Steve Johnson, founder and president of G2 Safety, a
distributor of gear designed to protect against workplace hazards,
in Anaheim, California: "I want our people to feel
comfortable discussing price. You don't want to ignore it; you
want to be confident about it. I'm training our guys to have a
discussion [about price] right upfront."

Sam Reese, CEO and president of sales consulting firm Miller
Heiman in Reno, Nevada: "To close a deal today, it
ultimately takes a clear understanding of how your solution clearly
impacts what the customer is trying to fix, accomplish or avoid.
It's all about the customer's concept. If you can satisfy
their concept of what they're trying to fix, accomplish or
avoid, then you can close business."

Joe Galvin, vice president and research director of CRM
Strategies for technology and consulting firm Gartner Inc. in
Stamford, Connecticut: "It's being knowledgeable about
your product, knowledgeable about the industries and markets into
which you're selling. It's being aware of your competitive
products and how to position yourself."

Mike Robson, founder and CEO of ATA Services, a Salt Lake
City-based firm that services and refurbishes existing ATM
machines: "It's back to the basics. It's having a
good value proposition, being in the right place at the right time,
and not looking like a putz. The follow-up is very important. You
have to chase the sale now. They're not asking me for business;
I'm asking them for business."

Increasing Margins & Reducing the Cycle

Sales Challenge No. 4:

Increasing Margins
Selling used to be about telling prospects how they'll increase
revenue; today it's about showing them how a product or service
will save them money. The Miller Heiman study found that 66 percent
of respondents believe buyers want discounts before they'll
make a purchase. "Buyers are tending to keep their eye on
pricing more than once or twice per year," Johnson says.

Successful sales teams are breaking the discount habit through
better service that allows them to offer premium pricing.
They're bypassing prospects that demand huge price breaks and
going for those more likely to appreciate quality service at a
slightly higher price. "You'll have fatter margins that
feed your business and allow you to get better customers who are
more loyal," Trailer says.

ATA Services has increased its margins by incorporating
value-added services into its bidding process, such as cleaning and
polishing ATM machines for clients. "In our early sales
process, the only thing we were selling is what we could cut the
price [of]," Robson says. "Now we try not to cut the
price, [but to] add more value." The result: ATA's profit
margin is predicted to grow by almost 40 percent this year.

A profitability breakdown of each customer-which includes an
analysis of time spent per customer, system changes made to
accommodate the client, and the salesperson's salary-can
identify where margin growth is being lost. "You'll find
your most difficult customers [that take] up the most resources are
also the ones causing the most problems-and where you have the
lowest margins," Reese says. "Those are the customers you
want to fire." Or at least figure out how to allocate fewer
resources in servicing them.

Hessan tells clients a price break might mean putting a
lower-level person on the account or cutting the number of reports
the client receives. "I'm up for getting very aggressive
about how we can cut our costs to serve clients and come up with
ways for them to pay less," Hessan says. "But usually, if
I'm coming up with a way for them to pay less, it's because
they're going to get less." Communispace is growing 83
percent annually, and sales should exceed $5 million in 2004.

Sales Challenge No. 5:

Reducing the Sales Cycle
Pushing clients to closure is a real problem for sales teams. In
fact, 90 percent of sales deals do not close as forecasted,
according to the CSO Insights study. In the Miller Heiman study,
meanwhile, 69 percent of sales leaders said prospects are regularly
putting off final decisions. "If you have a six-month sales
cycle, it typically takes nine calls to close the deal," says
Trailer.

To reduce the sales cycle, Robson is working with his sales team
to separate the real leads from ones that are a big waste of time.
"We've had to determine who we can't sell to,"
Robson says. "I think it's one of the reasons we've
survived." He's also revamped the company's sales
reporting and compensation structures so salespeople work toward
monthly and quarterly goals instead of an annual quota. These
changes have cut the 12-to-18-month sales cycle down to three to
six months.

Savvy sales managers are spending more time examining closing
rates-how many sales aren't closing-and they're instituting
"loss reviews," calling prospects who didn't buy to
find out why. Nothing is sold during the interaction; it's an
opportunity to find out why the deal fell through. "You may
find you lost the deal for other reasons than you thought,"
Reese says. Managers use this information to alter sales tactics in
ways that sell the next customer more effectively and quickly.

Trailer says companies need to pay greater attention to
psychographics, not just demographics. Psychographic questions
delve into a prospect's thought process, such as how much a
prospect values premium services or seems risk-taking vs. being
indecisive. By looking at common characteristics of their best
customers, sales teams can better target messages and reduce the
overall sales cycle. "Most [salespeople] aren't clear on
their psychographics," Trailer says. "Look at the
characteristics common among and unique to the best customers vs.
the worst customers." With a few changes in strategy, sales
teams may find their biggest challenge will be turning down
business instead of creating it.

Can You Relate?

CRM technologies help growing businesses sell more
efficiently. And while no single application is the solution for
all your business needs, here are three CRM applications that aim
to help you and your sales force close more sales and manage those
all-important relationships. All three offer a free online trial,
so you can try before you buy.

CRM
OnDemand, From Siebel
(866) 906-7878
Price: $70 per user, per month
With Siebel's CRM OnDemand, you can choose either the general
version or from one of the 23 industry-specific solutions in the
areas of consumer goods, high-tech, manufacturing and more. An
industry-specific solution provides interface templates featuring
special key data fields as well as industry-specific business
process support, analytics and reports. This CRM solution also
covers the standard marketing, sales and customer support fields,
and then some.

GoldMine 6.5, From FrontRange Solutions
(800) 776-7889
Price: $179.95
Goldmine 6.5 focuses on the four cycles of customer
retention-marketing, sales, service and support, and management.
These cycles include lead distribution through the Web; contact
management through a single, centralized database; automated
administrative tasks like sending customized e-mails; identifying
high-margin leads and more. You can also import existing data from
ACT! and Microsoft Excel or Outlook.

NetCRM, From NetSuite
(650) 627-1000
Price: $75 per user, per month
NetCRM includes built-in customizable dashboards that give
snapshots of the most important performance indicators, such as
customer and product rankings, and lead-generation statistics.
NetCRM also includes commissions management, automated e-mail
campaign statistics, customer support management, customizable
online lead forms, customer privileges and more.